BAE Systems signs contract with Qatar for Typhoon

The Defence Secretary was in Doha on 10 December to sign a deal with Qatar to supply 24 Typhoon jets. The deal is expected to be worth around £6Bn. The largest element of this goes to BAE Systems for supply of the aircraft, including support and initial training, is worth £5Bn. Alongside this, a weapons package covering MBDA-built Brimstone 2 ground-to-air and Meteor beyond-visual-range air-to-air missiles as well as Raytheon’s Paveway IV precision-guided bombs has been agreed. The Ministry of Defence component includes a package of training and cooperation between the two countries’ air forces, which includes training for Qatari pilots and ground crew in the UK. The first aircraft is expected to be delivered to Qatar in late 2022. All will be built at BAE Systems’ production facility in Warton, Lancashire. This will extend the life of the Typhoon assembly line by at least two years, until 2024, which excellent news for the north west in particular, and for the Typhoon manufacturing supply chain located throughout the country. Nevertheless, securing the UK’s aerospace sector is vital to our national security and the National Security Capability Review, currently underway in Government, will need to provide clarity on the UK’s combat air requirements post-Typhoon. EEF is advocating for a strategy similar in intent to the National Shipbuilding Strategy, launched in September.

SIPRI report rising defence sales

Sales of arms and military services by the world’s largest defence companies totalled $374.8Bn USD in 2016, according to new data released by the Stockholm International Peace Research Institute (SIPRI) on Monday. The first year of growth after five consecutive years of decline, this was 1.9% higher than 2015 and represents an increase of 38% since 2002. US companies faired particularly well, growing by 4% overall, driven by both domestic acquisitions and exports. Dominating the statistics, the US overall share of sales was 57.9% of the global total. Sales in Western Europe remained stable at a total of $91.6 billion, an increase of 0.2 per cent compared with 2015, yet there was divergence among the key nations, with falls in sales in France and Italy, while UK and German companies recorded overall increases. Any impact from the UK decision to withdraw from the European Union was not translated through to sales, which rose by 2% in 2016. BAE Systems, the fourth largest arms producer globally saw sales growth of 0.4%. However, it was GKN, who recorded sales growth of 43.2%, that was most noteworthy.

The SIPRI Arms Industry Database was created in 1989 and is the most widely cited source of information on international defence sales trends. It contains financial and employment data on companies operating in the sector worldwide. Since 1990, SIPRI has published data on defence sales and employment of the 100 largest of these arms-producing companies in the SIPRI Yearbook. ‘Arms sales’ are defined by SIPRI as sales of military goods and services to military customers, including sales for domestic procurement and sales for export.

EU establishes programme to deepen security cooperation among member states

On Monday, the European Council announced the formal establishment of the Permanent Structured Cooperation (PESCO), which will see 25 EU Member States collaborate on a set of collaborative defence projects. PESCO is an instrument in the EU Treaty to enable “willing Member States to pursue greater cooperation in defence and security.” The UK is not among them, recognition of the Government’s longstanding policy of the primacy of NATO in respect of European defence. The UK’s decision to leave the EU is seen by some as providing a catalyst for deeper EU security cooperation by removing a traditional blocker. The 17 projects announced at initiation are in areas including the setting up of an EU medical command, military mobility, maritime surveillance, and cyber security. While PESCO is purely intergovernmental, the European Defence Fund proposed by the European Commission in June will create incentives for cooperation on joint development and the acquisition of defence equipment and technology through co-financing from the EU budget. This could include some of the projects in PESCO framework. EU President, Jean-Claude Juncker, welcomed the announcement suggesting that pooling defence capacities in Europe makes perfect economic sense.

Russia a risk to under-sea cables

Speaking this week at the Royal United Services Institute, The Chief of the Defence Staff, Air Chief Marshall Sir Stuart Peach warned of a new threat posed by Russia to communications and internet cables that run under the sea. In his speech he said that Britain and NATO needed to prioritise protecting the lines of communication, as it would be an "immediately and potentially catastrophic" hit to the economy if they were cut or disrupted. In response to the threat posed by the modernisation of the Russian navy, NATO has prioritised missions and tasks to protect the sea lines of communication. According to Sir Stuart, it is important that NATO understands how important is mission is as Russia in addition to new ships and submarines continues to perfect both unconventional capabilities and information warfare. A report for the Policy Exchange think tank published earlier this month, the world's undersea communications network comprises an estimated 213 systems over 500,000 miles of cable. However, a lack of formal state ownership meant cables do not have strong protection in international law. Despite that, an estimated 97% of global communications and $10 trillion in daily financial transactions are transmitted by cables under the ocean.